How to reduce your monthly mortgage payment

October 5, 2016 by Brendan

Advice & Tips

The monthly mortgage payment is often one of the largest household bills to be deducted from your income each month. First time buyers may find it particularly difficult to get used to managing their budget every month, as their finances are stretched. There are ways to reduce the payment.

If you are on the lender’s Standard Variable Rate, approach them to see if they have any discounted rates or deals. You may be able to secure a fixed rate deal or a tracker mortgage which has a lower rate of interest, although you should calculate the long term cost of the deal, as arrangement fees can increase the cost.

While interest rates are at their lowest, try to make overpayments every month if possible. This will reduce the capital you owe and make your mortgage much cheaper in the long term. However, check with the lender that you won’t be penalised for making overpayments, although many will allow a specific percentage to be overpaid.

If you have financial difficulties, you may want to consider applying to increase the term of your mortgage. This will make the monthly payments lower but will increase the total amount which you repay overall. You may also be able to find an interest only mortgage which will reduce your monthly repayments. However, you will only be repaying the interest rather than any of the capital. You will be required to demonstrate how you will pay off the capital.

Chat to a CeMAP qualified mortgage adviser to find the most suitable method of reducing monthly payments.